Realising the benefits of smart meters

In 2006, the Victorian Government mandated the rollout of electricity smart maters to all households and small businesses across Victoria under the Advanced Metering Infrastructure (AMI) program.

The audit examined whether the deficiencies identified in our 2009 audit have been addressed and whether the Department of Economic Development, Jobs, Transport & Resources (DEDJTR) can demonstrate that the AMI program is delivering expected consumer benefits and is set up to maximise longer-term benefits.

The recommendations from VAGO's 2009 audit have been substantially addressed, however, many of the costs and benefits cannot be directly controlled by the state.

By the end of 2015, Victoria's electricity consumers will have paid an estimated $2.239 billion for metering services, including the rollout and connection of smart meters. In contrast, while a few benefits have accrued to consumers, benefits realisation is behind schedule and most benefits are yet to be realised. Current estimates suggest that approximately 80 per cent of the expected benefits could be achieved. There are significant uncertainties and risks associated with achieving these benefits, and consumers may experience a higher net cost than the most recent $319 million estimate.

Given that consumers have been progressively paying for the program since 2009 and ultimately pay the full costs, DEDJTR must focus now on actions that will accelerate the achievement of any benefits to consumers and avoid any further increase in the net costs of the program.